A turnover rate is the rate at which something or someone leaves and must be replaced with something or someone new. Employee turnover rates are always a concern for businesses, small and large. High rates can lead to interruptions in service and customer dissatisfaction, and it can be expensive to constantly recruit, hire and train new employees. A number of factors can affect employee turnover. These include low morale and poor job matching as well as stressful or dangerous working conditions and inadequate pay or benefits packages.
Certain types of businesses and positions have traditionally high turnover rates. These include childcare, retail, food service and telemarketing. Other segments, such as clinical healthcare workers and attorneys, traditionally have very low turnover rates. Most other businesses work to keep turnover rates in check, both to control hiring expenses and also to ensure consistency of service.
One common cause of high employee turnover rates is low pay and benefits packages. When a worker is employed in a low-wage position with limited benefits, there is little incentive to stay if a similar employer offers even a slightly higher rate of pay. Workers who make more, but whose salaries fall short of the going market rate, may feel undervalued at their current companies and look for a company that will pay them what they’re worth. Highly skilled workers often can be lured from a well-paying position by a higher offer from a company that desperately needs the employee’s skills. Benefits such as insurance, leave time and child care also contribute to employee satisfaction.
Poor job matching is another common cause of high employee turnover rates. Workers who are employed in jobs for which they are over- or under-qualified, or for which they have not received adequate training, may feel frustrated and be inclined to look for other work. Even those working in jobs for which they are properly qualified may leave if their personal style conflicts with either their manager’s style or with the corporate culture of the company.
Working conditions can also drastically affect employee turnover rates. Workers employed by companies with strong employee retention programs, low accident rates, and open communications policies are often happier at work and may even be content with lower salaries. On the other hand, employees of companies that do not provide adequate safety measures or fail to appreciate the value of employees may be more likely to seek employment with companies that offer more stable, comfortable environments.